Cuba Business News

State of Cuban economy - as reported by the Cuban government

Cuba’s broadest gauge of its foreign trade swung to a $488 million surplus in 2007, helped by a surge in service exports which have traditionally included health care provided in Venezuela, official statistics showed on Thursday.

The current account balance of payments moved to a surplus in 2007 from a $215 million deficit in 2006, as net service exports last year reached $7.8 billion, helping offset a trade deficit of about $6.2 billion, as gauged by current prices, according to data on National Statistics Office’s Web site.

The current account, the broadest measure of any country’s external transactions, can play a key role in augmenting or diminishing a country’s foreign currency reserves.

Cuba does not specify what it includes within the service export category, though on various occasions officials have said tourism and related revenues, the export of medical and other technical services and donations all fall within it.

Besides trade in goods and services, like tourism, the current account also includes financial transfers like profit repatriation and interest payments.

The statistical office’s data Thursday only provided data on current account’s tally of trade in goods and services.

Last year, Cuba’s exports of goods totaled about $4 billion compared with $3.2 billion in 2006, as tallied by current prices. Total imports of goods reached $10.2 billion compared with $9.5 billion in 2006.

Service exports were about $8 billion in 2007 at current prices, compared with about $6.7 billion in 2006. Service imports were $215 million in 2007 compared with $211 million in 2006.

Government sources and local analysts say that in recent years net service income has been mainly due to offering services like health care to leftist ally Venezuela.

That as enabled Cuba to more or less balance its external finances despite a huge trade deficit, begin paying debts contracted since 1991 and register strong growth after years of crisis that followed the demise of the Soviet Union.

Non-tourism related service exports began their dramatic increase after a 2004 accord with Venezuela, under which the oil-rich South American country pays for massive health and other assistance.

In that year, service exports were just under $4 billion, of which more than half were from tourism and related activities, at current prices. Imports were $5.5 billion and income from non-tourism services, such as sending doctors overseas, of around $1.5 billion.

The National Statistics Office has separately reported the 20 percent jump in service exports in 2007 was not related to tourism revenues, which stagnated at $2.2 billion.

Revenues from pharmaceutical and other joint ventures abroad may also be included, according to local economists, as well as the training of foreign students.

remember the line about the accountant.
Ask an accountant what 2 plus 2 equals and he’ll answer “What do you want it to be”
Cuba had better be careful about putting out such a rosy picture or its many creditors may want to start getting paid.

This report shows a more accurate reflection of the state of the Cuban economy than any “statistics” from the Cuban government:

HONG KONG (MarketWatch) Aug. 18, 2008—The Central Bank of Cuba informed Japan’s Nippon Export and Investment Insurance that it couldn’t pay for Japanese imports by the agreed upon dates, the Nikkei business daily reported Monday. “This isn’t a problem specific to this bank. Foreign exchange reserves for settling trade accounts are in short supply in Cuba,” said an offical at the Cuban central bank, according to the report.

The original article above is full of funny money stats but the fact remains that they are terrible at paying their bills and it has nothing to do with the embargo and everything to do with communism, Fidel and lack of freedom in Cuba.

I like this part “Foreign exchange reserves for settling trade accounts are in short supply in Cuba”. What a nice way of saying Cuba is broke.

so assume that all those computers and cell fones they’re selling now are all bought on credit.
Cuba has been broke since day one. Although i believe the embargo has also contributed somewhat to that, I think the main reasons are communism and elitism (understand the military lives quite well - but then even Caesar understood to keep his troops well fed if he wants to keep them on his side).
Ironically, I read somewhere else that this year tourism is up about 10% over same time last year, so either tourists are getting more frugal or the elitists are getting more greedy.